• Source:JND
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Unified Pension Scheme: The Union Cabinet, chaired by Prime Minister Narendra Modi, on Saturday approved the Unified Pension Scheme - a new pension scheme for government employees. The decision followed a long-standing demand from the central government employees, who were seeking a revival of the Old Pension Scheme (OPS), while rollback the current National Pension Scheme (NPS) system.

The newly launched version of the centre's post-retirement social security scheme will have two main components, Union Minister Ashwini Vaishnaw announced on Saturday in a press conference. The scheme seeks to provide an assured pension and family pension to the employees.

What Is Unified Pension Scheme (UPS)

The Unified Pension Scheme (UPS) is the latest iteration in the monthly social security pension provided to central government employees after their retirement. The new scheme has two main components as described by the Union Cabinet Minister Ashwini Vaishnaw -

1. An assured 50% of salary as the pension to the central government employee after retirement.

2. An assured family pension for the central government employee is the second pillar of the UPS scheme.

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UPS: Important Provisions

  • Assured Pension: 50% of the average basic pay drawn over the last 12 months prior to superannuation for a minimum qualifying service of 25 years
  • Proportionate for lesser service up to a minimum of 10 years of service
  • Assured Family Pension @60% of the pension of the employee immediately before her/his demise
  • Assured Minimum Pension of @10000 per month on superannuation after a minimum of 10 years of service
  • Inflation Indexation: On assured pension, on assured family pension and assured minimum pension Dearness relief based on All India Consumer Price Index for Industrial Workers (AICPI-W) as in case of serving employees
  • Lump-sum payment at superannuation in addition to gratuity
  • 1/10th of monthly emolument (pay + DA) as on the date of superannuation for every completed six months of service
  • This payment will not reduce the quantum of assured pension

Unified Pension Scheme: Will NPS Be Scraped?

According to Vaishnaw, the New Pension Scheme, which was introduced in 2004 by the Atal Bihari Vajpayee-led NDA government, will stay for now and the government employees will be given a choice to opt between the New Pension Scheme and Old Pension Scheme.

UPS Vs NPS: How Unified Pension Scheme Is Different From NPS

The National Pension Scheme (NPS) is also a social security initiative by the central government which can be availed by the central government employees, private sector employees as well as the workers of the unrecognised sector. The scheme promotes regular investments in a pension account throughout your employment. Upon retirement, you can withdraw a portion of the accumulated funds and receive the rest as a monthly pension.

The NPS does not have an assured 50 per cent of the salary as a pension for the central government employees.

Will States Follow the Unified Pension Scheme

It is expected that the state government will follow the central's new scheme as it is more in tandem with the demands of the employees.